SaaS Agreements – Online Sales – Terms and Conditions
Many SaaS suppliers now conclude sales of SaaS products with customers online, usually by having customers “click” acceptance of terms and conditions published on their website. SaaS suppliers need to ensure that their online terms and conditions include the following information, in order to create a legally enforceable SaaS agreement with the customer.
These Regulations apply to all SaaS suppliers who sell or advertise SaaS services online. The Regulations apply BTB (business to business) and BTC (business to customer).
The SaaS supplier must provide the following information on its website:
- legal name i.e. XYZ Ltd. If this is different from your trading name any differences should be explained;
- geographical address, which must be the registered office if you are a company;
- which country your business is registered in;
- the registration number of your company;
- details of any supervisory body which regulates your business i.e. the FSA;
- VAT number and where you are registered for VAT;
- clear details of prices and whether or not delivery and/or tax is included.
It is advisable to include all of the above information (as applicable) in your online terms and conditions.
Incorporation of Terms
In order for a SaaS customer to be legally bound by your online terms and conditions, the content of the terms and conditions must be drawn to the customer’s attention before the SaaS products are purchased.
Customers should be required to:
- “click” acceptance to your terms and conditions; or
- read, or scroll through the terms and conditions;
before purchasing the SaaS products.
Changes to Terms and Conditions
If you want customers to be legally bound by future changes to your online terms and conditions, you must state this in your online terms and conditions. You should also make the terms and conditions available on your website at all times, so that they can be stored or reproduced by customers.
Customer Cancellation Rights
If you are selling SaaS products to consumers the provisions of the Distance Selling Regulations 2000 (as amended in 2005) will apply and from Autumn 2013 the new EU Consumer Rights Directive will also apply. These contain provisions about mandatory “cooling off” periods and customer cancellation rights, with limited exceptions. However, if you only sell SaaS products BTB, these rules do not apply.
In addition to the E-Commerce Regulations, depending on whether or not you supply SaaS products BTB or BTC, other laws such as the Unfair Contract Terms Act 1977, the Unfair Terms in Consumer Contracts Regulations 1999 and the Supply of Goods and Services Act 1982 will apply to your online terms and conditions.
Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:
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